novelty, inc., an indiana corporation; …... "disney/pixar ® lenticularhat with ... case no....
TRANSCRIPT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Reuben Yeroushalmi (SBN 193981)Ben Yeroushalmi (SBN 232540)Peter T. Sato (SBN 238486)YEROUSHALMI & YEROUSHALMI
9100 Wilshire Boulevard, Suite 240WBeverly Hills, Califomia 90212Telephone: 310.623.1926Facsimile: 310.623.1930
Attorneys for PlaintiffConsumer Advocacy Group, Inc.
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
CONSUMER ADVOCACY GROUP, INC.,in the public interest.
Plaintiff,
NOVELTY, INC., an Indiana Corporation;AMERICA'S SUPPLIERS, INC., dbaDollarDays International, LLC, a DelawareCorporation; DOLLARDAYSINTERNATIONAL, INC., a DelawareCorporation; DOLLARDAYSINTERNATIONAL, LLC, a DelawareCorporation; ROCK BOTTOM DEALS, anIllinois Corporation; and DOES 1-20;
Defendants.
CASE NO. BC475762
CONSENT JUDGMENT [PROPOSED]
Dept: 37Judge: Hon. Marc MarmaroFAC filed: October 29,2013
1. INTRODUCTION
l.I This Consent Judgment is entered into by and between plaintiff Consumer
Advocacy Group, Inc. ("CAG") acting on behalf of itself and in the interest of the public anc
defendants Novelty, Inc., and defendants America's Suppliers, Inc. dba DollarDays International
51222416.1
CONSENT JUDGMENT |PROPOSED|
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
LLC, DollarDays International, Inc., and DollarDays International, LLC (hereinafter,
collectively, "Defendants"), with each a Party and collectively referred to as "Parties." By
stipulation of the Parties, the Court will retain jurisdiction to enforce the settlement under Code
of Civil Procedure § 664.6.
1.2 Defendants employ ten or morepersons, are personsin the courseof doing
business for purposes of the Safe Drinking Water and Toxic Enforcement Act of 1986,
CaliforniaHealth & Safety Code § 25249.5, et seq. ("Proposition 65"), and imported, distributed,
and/or sold "CHILDREN'S HATS WITH LENTICULAR CHARACTER PATCH", including
one or more of the following: 1) "Monsters v.Aliens™" Children's Cap (Yellow and Blue with
Orange and Yellow Insectosaurous Character) (BarCode #9408026120) "Disney/Pixar®
LenticularHat with Wall-e patch, bar code: "7 94080 24270 1", light blue colored hat with
darker blue colored bill.", 2) Disney/Pixar© Lenticular Hat with Wall-e character patch, barcode:
"7 94080 24270 1", light blue colored hat with darker blue colored bill, 3) Disney/Pixar©
Lenticular Hat wdth Eve character patch, barcode: "7 94080 24270 1", purple and pink colored
hat, 4) Disney/Pixar© Lenticular Hat with M-0 character patch, barcode: "7 94080 24270 1",
beige colored hat, 5) Disney/Pixar© Lenticular Hat with M-O character patch, barcode: "7 94080
24270 1", black colored hat with red colored bill." (hereinafter "Covered Products").
1.3 Notice of Violation.
1.3.1 On or about February 23, 2011, GAG served one or more Defendants, anc
various public enforcement agencies with a document entitled "60-Day Notice of Intent to Sue'
(the "February 23,2011 Notice") that provided the recipients with notice of alleged violations o
Health & Safety Code § 25249.6 for failing to warn individuals in California of exposures to
Diethyl Hexyl Phthalate contained in "Monsters vs. Aliens™" Children's Cap (Yellow and Blue
with Orange and Yellow Insectosaurous Character) (Bar Code # 9408026120).
1.3.2 On or about April 17, 2013, CAG served one or more Defendants, anc
various public enforcement agencies with a document entitled "60-Day Notice of Intent to Sue'
(the "April 17, 2013 Notice") that provided the recipients with notice of alleged violations o
CONSENT JUDGMENT |PRQPOSED|SI2224I6.1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Health & Safety Code § 25249.6 for failing to warn individuals in California of exposures to
Diethyl Hexyl Phthalate contained in Children's Hats with Lenticular Character Patch
1.3.3 No public enforcer has commenced or diligently prosecuted the
allegations set forth in the February 23,2011 and April 17,2013 Notices.
1.4 Complaint.
On December 22, 2011, CAG filed a Complaint for Penalty, Injunction, and Restitution
("Complaint") in Los Angeles Superior Court, Case No. BC475762. On October 29,2013, CAG
filed a First Amended Complaint. The Complaint alleges, among other things, that Defendants
violated Proposition 65 by failing to give clear and reasonable warnings of exposure to DEHF
from the Covered Products.
1.5 Consent to Jurisdiction
For purposes of this Consent Judgment, the parties stipulate that this Court has
jurisdiction over the allegations of violations contained in the Complaint, and personal
jurisdiction over Defendants as to the acts alleged in the Complaint, that venue is proper in the
City and County of Los Angeles and that this Court has jurisdiction to enter this Conseni
Judgment as a full settlement and resolution of the allegations contained in the Complaint, and oi
all claims which were or could have been raised by any person or entity based in whole or in
part, directly or indirectly, on the facts alleged therein or arising therefrom or related to.
1.6 No Admission
This Consent Judgment resolves claims that are denied and disputed. The parties entei
into this Consent Judgment pursuant to a full and final settlement of any and all claims between
the parties for the purpose of avoiding prolonged litigation. This Consent Judgment shall not
constitute an admission with respect to any material allegation of the Complaint, each and every
allegation of which Defendants deny, nor may this Consent Judgment or compliance with it be
used as evidence of any wrongdoing, misconduct, culpability or liability on the part o
Defendants.
CONSENT JUDGMENT |PROPOSED)51222416.1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
2. DEFINITIONS
2.1 "Covered Products" means Children's Hats with Lenticular Character Patch
containing DEHP imported, distributed, or sold by Defendants.
2.2 "Effective Date" means the date that this Consent Judgment is approved by the
Court.
2.3 "DEHP" means Diethyl Hexyl Phthalate.
2.5 "Notices" means the February 23,2011 and April 17,2013 Notices.
3. INJUNCTIVE RELIEF/REFORMULATION
3.1 Defendants have ceased sale of the Covered Products in California. In the future
if Defendants decide to order the Covered Products those Covered Products sold or offered foi
sale in California shall be formulated to contain less than 0.1% DEHP (1,000 parts per million)
by weight.
4. SETTLEMENT PAYMENT
4.1 Payment and Due Date; Within ten (10) days of the approval of the Consent
Judgment, Defendants shall pay a total of thirty-three thousand dollars ($33,000) in full and
complete settlement of all monetary claims by CAG related to the Notices. Defendants shall pay
the sum of thirty-three thousand dollars ($33,000), as follows:
4.2 Reimbursement of Attorneys' Fees and Costs: Defendants shall pay $31,000.00
to "Yeroushalmi & Yeroushalmi" as reimbursement for the investigation fees and costs, testing
costs, expert fees, attorney fees, and other litigation costs and expenses for all work performed
through the approval of this Consent Judgment.
4.3 Civil Penalties. Defendants shall issue two separate checks for a total amount of
($1,000) as penalties pursuant to Health & Safety Code § 25249.12: (a) one check made payable
to the State of California's Office of Environmental Health Hazard Assessment (OEHHA) in the
amount of $750.00, representing 75% of the total penalty; and (b) one check to Consume:
Advocacy Group, Inc. in the amount of $250.00, representing 25% of the total penalty. Two
separate 1099s shall be issued for the above payments: The first 1099 shall be issued to OEHHA.
CONSENT JUDGMENT |PROPOSED|S12224I6.I
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
P.O. Box 4010, Sacramento, CA 95184 (BIN: 68-0284486) in the amount of $750.00. The
second 1099 shall be issued in the amount of $250.00 to CAG and delivered to: Yeroushalmi &
Yeroushalmi, 9100 Wilshire Boulevard, Suite 240W, Beverly Hills, California 90212. Payment
of civil penalties by Defendants does not constitute an admission with respect to any material
allegation of the Complaint, each and every allegation of which Defendants deny, nor may
payment of civil penalties be used as evidence of any wrongdoing, misconduct, culpability oi
liability on the part ofDefendants.
4.4 Payment In Lieu of Civil Penalties: Defendants shall pay $1,000.00 in lieu ol
civil penalties to "Consumer Advocacy Group, Inc." CAG will use this payment foi
investigation of the public's exposure to Proposition 65 listed chemicals through various means
laboratory fees for testing for Proposition 65 listed chemicals, expert fees for evaluating
exposures through various mediums, including but not limited to consumer product,
occupational, and environmental exposures to Proposition 65 listed chemicals, and the cost oi
hiring consulting and retained experts who assist with the extensive scientific analysis necessary
for those files in litigation, in order to reduce the public's exposure to Proposition 65 listed
chemicals by notifying those persons and/or entities believed to be responsible for such
exposures and attempting to persuade those persons and/or entities to reformulate their products
or the source of exposure to completely eliminate or lower the level of Proposition 65 listed
chemicals, thereby addressing the same public harm as allegedly in the instant Action. Further,
should the court require it, CAG will submit under seal, an accounting of these funds as
described above as to how the funds were used. The check shall be made payable to "Consumer
Advocacy Group, Inc."
4.5 All Payments referenced in paragraphs 4.2, 4.3, and 4.4, shall be delivered to
Reuben Yeroushalmi, Yeroushalmi & Yeroushalmi, 9100 Wilshire Blvd., Suite 240W, Beverly
Hills, CA 90212, within 10 days after the Consent Judgment is signed.
CONSENT JUDGMENT iPROPOSED]51222416.1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
5. MATTERS COVERED BY THIS CONSENT JUDGMENT
5.1 This Consent Judgment is a full, final, and binding resolution between CAG, on
behalf of itself and in the public interest, and Defendants and their officers, directors, insurers
employees, parents, shareholders, divisions, subdivisions, subsidiaries, partners, affiliates, sister
companies, and their successors and assigns ("Defendant Releasees"), or any other person in the
course of doing business, and the successors and assigns of any of them, who may use, maintain,
distribute or sell Covered Products ("Downstream Defendant Releasees"), for all claims for
violations of Proposition 65 up through the Effective Date based on exposure to DEHP from
Covered Products as set forth in the Notices. Defendants' and Defendant Releasees' compliance
with this Consent Judgment shall constitute compliance with Proposition 65 with respect to
exposure to DEHP fi-om Covered Products.
5.2 CAG on behalf of itself, its past and current agents, representatives, attorneys
successors, and/or assignees, hereby waives all rights to institute or participate in, directly or
indirectly, any form of legal action and releases all claims, including, without limitation, all
actions, and causes of action, in law or in equity, suits, liabilities, demands, obligations,
damages, costs, fines, penalties, losses, or expenses (including, but not limited to, investigation
fees, expert fees, and attorneys' fees) of any nature whatsoever, whether known or unknown,
fixed or contingent (collectively "Claims"), against Defendants, Defendant Releasees, anc
Downstream Defendant Releasees arising from any violation of Proposition 65 or any other
statutory or common law regarding the failure to warn about exposure to DEHP from any and al
Covered Products, including but not limited to the Covered Products, imported, distributed, or
sold by Defendants and Defendant Releasees. In furtherance of the foregoing, as to allegec
exposures to DEHP from Covered Products, CAG hereby waives any and all rights and benefits
which it now has, or in the future may have, conferred upon it with respect to the Claims arising
from any violation of Proposition 65 or any other statutory or common law regarding the failure
to wam about exposure to DEHP from Covered Products by virtue of the provisions of section
1542 of the California Civil Code, which provides as follows
6CONSENT JUDG^
S1222416.1
CONSENT JUDGMENT (PROPOSEDI
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THECREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HERFAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IFKNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HISOR HER SETTLEMENT WITH THE DEBTOR.
CAG understands and acknowledges that the significance and consequence of this waiver ol
California Civil Code section 1542 is that even if CAG suffers future damages arising out of oi
resulting from, or related directly or indirectly to, in whole or in part, the Claims arising from
any violation of Proposition 65 or any other statutory or common law regarding the failure to
warn about exposure to DEHP from Covered Products, including but not limited to any exposure
to, or failure to warn with respect to exposure to DEHP from Covered Products, CAG will not
be able to make any claim for those damages against Defendants or the Defendant Releasees oi
Downstream Defendant Releasees. Furthermore, CAG acknowledges that it intends these
consequences for any such Claims arising from any violation of Proposition 65 or any othei
statutory or common law regarding the failure to warn about exposure to DEHP from Covered
Products as may exist as of the date of this release but which CAG does not know exist, and
which, if known, would materially affect their decision to enter into this Consent Judgment
regardless of whether their lack of knowledge is the result of ignorance, oversight, error,
negligence, or any other cause.
6. ENFORCEMENT OF JUDGMENT
6.1 The terms of this Consent Judgment shall be enforced exclusively by the parties
hereto. The parties may, by noticed motion or order to show cause before the Superior Court oi
California, City and County of Los Angeles, giving the notice required by law, enforce the terms
and conditions contained herein. A Party may enforce any of the terms and conditions of this
Consent Judgment only after that Party first provides 30 days' notice to the Party allegedly
failing to comply with the terms and conditions of this Consent Judgment and attempts to resolve
such Party's failure to comply in an open and good faith manner.
6.2 Notice of Violation. Prior to bringing any motion, order to show cause, or othei
proceeding to enforce Section 3 of this Consent Judgment, CAG shall provide a Notice o
CONSENT JUDGMENT [PROPOSEDI51222416.1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Violation ("NOV") to Defendants. The NOV shall include for each Covered Products: the
date(s) the alleged violation(s) was observed and the location at which the Covered Products was
offered for sale, and shall be accompanied by all test data obtained by CAG regarding the
Covered Products.
6.2.1 Non-Contested NOV. CAG shall take no further action regarding the
alleged violation if, within 30 days of receiving such NOV, Defendants serves a Notice ol
Election ("NOE") that meets one of the following conditions:
(a) The Covered Product was shipped by Defendants for sale in
California before the Effective Date, or
(b) Since receiving the NOV Defendants have taken corrective action
by either (i) requesting that its customers in California remove the Covered Product
identified in the NOV from sale in California and destroy or return the Covered Product
to Defendants, or (ii) providing a clear and reasonable warning for the Covered Product
identified in the NOV pursuant to 27 Cal. Code Regs. § 25603.
6.2.2 Contested NOV. Defendants may serve an NOE informing CAG of its
election to contest the NOV within 30 days of receiving the NOV.
(a) In its election. Defendants may request that the same sample(s) ol
Covered Product(s) tested by CAG be subject to confirmatory testing at an EPA-
accredited laboratory.
(b) If the confirmatory testing establishes that the Covered Product
does not contain DEHP in excess of the level allowed in Section 3.1 CAG shall take no
further action regarding the alleged violation. If the testing does not establish compliance
with Section 3.1, Defendants may withdraw its NOE to contest the violation and may
serve a new NOE pursuant to Section 6.2.1.
(c) If Defendants do not withdraw an NOE to contest the NOV, the
Parties shall meet and confer for a period of no less than 30 days before CAG may seek
an order enforcing the terms of this Consent Judgment.
CONSENT JUDGMENT IPRGPOSED]SI2224I6.1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
6.3. In any proceeding brought by either Party to enforce this Consent Judgment
the prevailing party shall be entitled to recover its attorney's fees and costs.
7. ENTRY OF CONSENT JUDGMENT
7.1 CAG shall file a motion seeking approval of this Consent Judgment pursuant to
California Health & Safety Code § 25249.7(f). Upon entry of the Consent Judgment, CAG and
Defendants waive their respective rights to a hearing or trial on the allegations of the Complaint.
7.2 If this Consent Judgment is not approved by the Court, (a) this Consent Judgment
and any and all prior agreements between the parties merged herein shall terminate and become
null and void, and the actions shall revert to the status that existed prior to the execution date of
this Consent Judgment; (b) no term of this Consent Judgment or any draft thereof, or of the
negotiation, documentation, or other part or aspect of the Parties' settlement discussions, shall
have any effect, nor shall any such matter be admissible in evidence for any purpose in this
Action, or in any other proceeding; and (c) the Parties agree to meet and confer to determine
whether to modify the terms of the Consent Judgment and to resubmit it for approval.
8. MODIFICATION OF JUDGMENT
8.1 This Consent Judgment may be modified only upon written agreement of the
parties and upon entry of a modified Consent Judgment by the Court thereon, or upon motion of
anypartyas provided by law and uponentryofa modified Consent Judgment by the Court.
8.2 Any Party seeking to modify this Consent Judgment shall attemptin goodfaith to
meet and confer with the other Party prior to filing a motion to modify the Consent Judgment.
9. RETENTION OF JURISDICTION
9.1 This Court shall retain jurisdiction of this matter to implement and enforce the
terms of this Consent Judgment.
10. DUTIES LIMITED TO CALIFORNIA
This Consent Judgment shall have no effect on Covered Products sold outside the State o
California.
CONSENT JUDGMENT [PROPOSED|SI222416.I
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
11. SERVICE ON THE ATTORNEY GENERAL
11.1 GAG shall serve a copy of this Consent Judgment, signed by both parties, on the
California Attorney General so that the Attorney General may review this Consent Judgment
prior to its submittal to the Court for approval. No sooner than forty-five (45) days after the
Attorney General has received the aforementioned copy of this Consent Judgment, and in the
absence of any written objection by the Attorney General to the terms of this Consent Judgment,
the parties may then submit it to the Court for approval.
12. ATTORNEY FEES
12.1 Except as specifically provided in Section 4.2, each Party shall bear its own costs
and attorney fees in connection with this action.
13. GOVERNING LAW
13.1 The validity, construction and performance of this Consent Judgment shall be
govemed by the laws of the State of California, without reference to any conflicts of law
provisions ofCalifornia law.
13.2 The Parties, including their counsel, have participated in the preparation of this
Consent Judgment and this Consent Judgment is the result of the joint efforts of the Parties. This
Consent Judgment was subject to revision and modification by the Parties and has been acceptec
and approved as to its final form by all Parties and their counsel. Accordingly, any uncertainty
or ambiguity existing in this Consent Judgment shall not be interpreted against any Party as a
result of the manner of the preparation of this Consent Judgment. Each Party to this Consent
Judgment agrees that any statute or rule of construction providing that ambiguities are to be
resolved against the drafting Party should not be employed in the interpretation of this Consem
Judgment and, in this regard, the Parties hereby waive California Civil Code § 1654.
14. EXECUTION AND COUNTERPARTS
14.1 This Consent Judgment may be executed in counterparts and by means o
facsimile or portable document format (pdf), which taken together shall be deemed to constitute
one document.
10
CONSENT JUDGMENT |PROPOSED]SI222416.1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
15. NOTICES
15.1 Any notices under this Consent Judgment shall be by personal delivery or First
Class Mail.
If to CAG:
Reuben Yeroushalmi, Esq.9100 Wilshire Boulevard, Suite 240WBeverly Hills, CA 90212(310)623-1926
If to Noveltv. Inc.Caka "Noveltv. Inc."V:
Todd Green, President, orCurrent President/CEO
Novelty, Inc.351 W. Muskegon DriveGreenfield, IN 46140
With a copy to:
Donald Weissman, Esq.WEISSMAN LAW FIRM
5567 Reseda Blvd, Suite 118Tarzana, CA 91356Facsimile: (818) 705-2634
If to America's Suppliers. Inc..
DollarDavs International. Inc.. or
DollarDavs International. LLC taka "Dollardavs""):
Marc J. Joseph, CEOOr Current President/CEO
DollarDays International, Inc.7575 E Redfield Rd, Ste 201Scottsdale, AZ 85260
With a copy to:
Michael P. Cutler
POLSINELLI LLP
11
CONSENT JUDGMENT |PROPOSED|5I2224I6.I